What Retailers Need to Know About Chinese Consumers' Digital Consumption Behaviour Before Entering the China Market
In North America, the goal is always to get customers to visit a website or a landing page to purchase a product. Every marketing channel that is part of the marketing mix is designed to do this, with the call-to-action being "visit our website".
To track the results from various campaigns and to gauge the effectiveness of our marketing efforts, we would use tools like Google trackable links (UTMs), landing page providers/platforms, bit.ly links, or dedicated coupon codes.
THE DIFFERENCE BETWEEN HOW CHINESE CONSUMERS SHOP ONLINE VS NORTH AMERICAN CONSUMERS
In the China market, the reverse is true, instead of making shoppers visit a central website where oftentimes it's a less than optimal online shopping experience, hundreds of thousands of brands are listed on the online shopping marketplace, with the largest ones being T-Mall (owned by Alibaba), JD.com, VIPShop, Mogu Jie, and PingDuoDuo.
On these eCommerce platforms, brands large and small set up their own branded shop presence. For example, this past June 18th, which is China's second-largest online shopping festival day 618, Apple set up its first-ever brand store in China on Tmall.com. This means sales are taking place on channels OTHER THAN Apple's own brand website.
La Mer showcases bestsellers on its official TMall store products page.
SK-II's Official TMall store opens with a video and scrolls down to the brand's stop sellers pictured on the right.
The same goes for a variety of other luxury brands, from Valentino to Prada, SK-II to La Mer, who have set up official brand stores on TMall.com in an effort to go where Chinese consumers are.
These online platforms hold so much power that news outlets within China and abroad judge the performance of key retail shopping times and periods such as Singles Day, 618, Qixi Festival, and Chinese New Year based on how much is sold through these platforms.
For example, Singles Day is the world's largest shopping day in China, and last year Alibaba alone broke sales records by selling over $38.4 BILLION USD in 24 hours, which is more than half of what Amazon sells in a quarter. Let's keep in mind that this is just on one single sales platform, we haven't even accounted for the other eCommerce platforms and other retailers that have jumped on board the Singles Day bandwagon to offer attractive sales on a shopping day pioneered by Alibaba. According to an article on eMarketer in 2019, Alibaba holds a 53.3% share of the eCommerce market.
Versace Official TMall Brand Store looks like an official website with landing page images of latest Men's and Women's fashion.
Valentino Official TMall Brand Store highlights Brand Ambassador & Actress Tang Yan.
What you should be taking away from all this is that the major difference when marketing your brand online to Chinese consumers in China is to bring your brand to buyers, not try to make it come to you so it makes your life easier to track what they are doing. You want to have a presence on each of the major eCommerce platforms, to make it easier for shoppers to find your brand. Payment options are also seamlessly integrated, where users can purchase with one-click with saved consumer profiles and payment options like Alipay and WeChat Pay. China's eCommerce giants have also made significant advances in its warehousing and delivery infrastructure, meaning in certain Tier 1 cities (such as Shanghai, Beijing, Shenzhen), you could receive your online order within the hour, much like when you are ordering food delivery.
From Cartier to Vacheron Constantin to Brietling and more, you will find numerous luxury watch brands with their own TMall Official Stores.
Top-selling watches as shown on TMall's 'Luxury Pavilion'. Yes - people buy luxury watches online in China.
How would this look like if North America adopted these integrated online shopping options? It would look like where Amazon is going now, with the launch of Amazon luxury stores on its mobile app. Amazon's first luxury online shop is Oscar de la Renta.
Is this something new? Nope. They are actually borrowing from something that has been the trend in China for years now. What changed? Why are they doing this now? One, because someone else has tested it and it has worked, building brand confidence for luxury brands that they can have a presence on platforms other than their own brand controlled one. Second, shopping behaviour has changed since COVID; for those who have tried going out and shopping, the long lineups outside stores that can only allow 5 people inside have taken the joy out of shopping. Who wants to line up for 1 hour only to shop for 5 minutes? Why not make it easier for me to find the brands I want online so I can order it, and return it, to cater to my needs and save me time?
It is super interesting to see a reversal now where North American eCommerce giants are adopting practices, processes, and business strategy from China. China is a country that essentially skipped the desktop generation, and went straight to having everything on mobile. This is why the lives of Chinese consumers are so integrated on their mobile devices, and why people say how they can leave their home without their wallets and be fine, because just by using WeChat alone they can do everything from renting bikes, paying for utilities, hailing cabs, ordering food, shopping online and more. The Chinese have digitized their lives and leaped forward ahead of us, and this provides useful case studies as brands outside of China looks to make their mobile and digital strategies more seamless and integrated, and also shows us the path to how we can launch a brand successfully in China.
Go where the customers are, and tailor the brand experience to that platform, instead of trying to bend an eCommerce platform to adhere to your brand.